| It's time to prepare bids for Wi-Max licenses |
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Since the start of telecommunications liberalisation, competition in the local loop has proven to be an elusive goal. 2nd operators and ISPs have suffered from having both the technical performance and the cost of access to their customers controlled by their strongest competitor, the incumbent local-loop operator. This has led to incumbents facing the wrath of regulators on the one side over access charges, and with resistance to tariff rebalancing on the other hand that would remove the arbitrage-based heat of competition taking away highly profitable long-distance and international business. A far from satisfactory situation for all. Suddenly the potential of Wi-Max as a low-cost, high performance access technology may resolve this situation. Examining this potential is urgent, as many countries have imminent plans to license wireless local-loop access.
The technological uncertainty is still high, and it is not clear whether it will trigger true competition in the local loop or not. However the size of the missed opportunity if it does take off much more than outweighs the relative small amount of time and effort that would be wasted now if WLL becomes a cul-de-sac. We have identified six short and cheap actions players should take now, to determine if they should get involved in WLL (e.g. Wi-Max) licensing. Executive Summary:New low-cost wireless broadband systems are bringing affordable DSL capability to customers up to 50 kilometres from base-stations, hence breaking the copper-loop monopoly of incumbents. Extension to voice and to mobile services is predicted. Although there is no Wi-Max standard yet, and the systems in operation are proprietary systems, regulators in Europe, Asia and North America are preparing licensing rounds. Given investor’s memories of 3G meltdown and a general reluctance to invest in telecoms, there is little hype and service launch has been a quiet and local affair. The uncertainty in market acceptance and size, in technology and costs is a convenient excuse to wait and see. However the strategic implications if Wi-Max succeeds are too big to risk “missing the boat”:
Fixed and mobile operators, ISPs and vendors should get ready to seize the initiative first and bid for Wi-Max licenses by now investing in 6 low cost and low risk activities to evaluate the strategic implications of Wi-Max. |